Maryland lawmakers last week killed what could have been the toughest legislative restrictions yet on dealerships' finance profits.
But in other states - California and Texas - the push to restrict those profits remains intact.
The Maryland bill would have imposed a 1.5 percent cap on interest rate markups.
Dealerships commonly mark up the wholesale interest rate they receive from a finance company or bank when they arrange car loans for customers. Most finance companies and banks limit that amount to 2.5 percent.
The bill, called the Maryland Motor Vehicle Financing Disclosure Act, was rejected Monday, March 21, by a state House committee.
The bill also would have required dealerships to make written disclosures on a separate form.
Those disclosures included the customer's credit score and the interest rate markup.
The dealership also would have had to tell customers that they may be able to obtain a lower interest rate from another lender.
Dealerships could have charged a $150 processing fee in lieu of the 1.5 percent markup.
"Finance profit regulation is still a major concern for the industry," says Kenneth Rojc, a Chicago lawyer who represents finance companies and banks.
In California, lawmakers are considering legislation that would cap interest rate markups at 2.5 percent. And a proposed California ballot initiative that would limit finance profits to $150 per transaction is gathering steam.
In Texas, state regulators have recommended additional finance disclosures.
As of March 3, the Texas Office of Consumer Credit began recommending that dealerships disclose to customers that interest rates are negotiable and that the dealership may make money on the rate.
The office also advises dealerships to disclose that the customer may obtain their own financing.
Several industry associations, including the National Automobile Dealers Association, support disclosing that interest rates are negotiable and that dealerships may profit from arranging car loans.